An interest rate of 5% might appear high for borrowing money for three years, but Piraeus is rated CCC, well into junk territory. It’s not too long ago either that investors were fretting over Greece’s possible exit from the euro zone. The country’s banks also found themselves shuttered from international markets during Greece’s debt troubles.

“Can you imagine a Greek bank issuing at such a yield a year ago? It would not have been possible,” said Panos Simos, a fund manager at NBG Asset Management in Athens, which has €1.6 billion in assets.

The Piraeus bond deal underscores both the continued improvement in the perception of Greece’s economy as well as the flood of cash in the financial system that has depressed returns on debt of all stripes.

The yield on 10-year Greek government bonds has nearly halved to 6.75% from 13% a year ago, for instance.

Overseas investors, who had shunned Greek assets when Greece’s debt troubles ravaged the euro-zone, are also returning. Over 240 institutions from 25 countries bought the bonds, Piraeus Bank said.

This heady demand did mean some couldn’t share in the full bonanza: Mr. Simos said that he could only get a quarter of his order.